FAQ on Companies Fresh Start Scheme, 2020 (CFSS)

MCA Fresh Start Scheme

Notification of MCA:

In line with its circular dated March 24, 2020, MCA has introduced Companies Fresh Start Scheme, 2020 (“Scheme”) vide circular no 12/2020 dated March 3, 2020 under Section 460 of the Companies Act, 2013 (“Act”) read with Section 403. The salient features of the Scheme are given below.

Which companies can take benefit of the Scheme?

Any company which has defaulted in filing any document, return, statement, etc. with MCA21 registry are eligible (“Eligible Company”) to participate in the Scheme except the following:

• Companies for striking-off the name has been initiated under Section 248 of the Act; (Section 560 of the CA,1956)
• Companies which have already filed application for striking-off name under Section 248 of the Act;
• Companies which have been amalgamated under scheme of arrangement or compromise;
• Companies which have filed application for obtaining status of ‘dormant company’ under section 455 of the Act;
• Vanishing companies;

Purpose of the Scheme?

Any Eligible Company can file any form, statement or return etc., which was required to be filed under the Act but the Company has defaulted in filing the said form, return etc. Such belated forms can be filed on payment of normal fees as prescribed under the Companies (Registration Offices and Fees) Rules, 2014. No additional fee shall be payable. Thus, filing related defaults can be made good irrespective of duration of default.

Duration?

April 01, 2020 to September 30, 2020

Belated filings under C. A., 1956 are covered or Not?

Yes, belated filings under the Companies Act, 1956, can also be filed under the Scheme

What forms, returns etc., can be filed under the Scheme?

All forms including annual forms like AOC-4, MGT-7 can be filed under the Scheme.

The following forms, however cannot be filed:

SH-7 (only for increase of authorized capital)

Charge related Forms (CHG-1, CHG-4, CHG-8 and CHG-9)

Benefits of Scheme

Exemption from payment of any additional fees;

Immunity from prosecution to the extent of default connected with non-filing of form; and

Immunity from proceedings related to adjudication of penalty under Section 454.

For example, immunity against non-filing of form AOC-4 under Section 137, can be availed under the Scheme by filing the Form but immunity from consequential defaults arising on account of default like misappropriation of funds in the financial statements, will not be got immunity.

Circumstances under which immunity is not available under the Scheme?

An Eligible Company cannot avail any immunity under the Scheme in the following cases:

1. Where any appeal in respect of matter for which immunity is being sought, is pending before any court of law;

2. Where any management dispute is pending before any court of law or tribunal;

3.  Where the court has ordered conviction in the matter and no appeal has been filed, before coming into force of this Scheme; and

4.  Where penalty has been adjudicated under Section 454 of the Act and no appeal has been filed, before coming into force of this Scheme.

Whether benefit can be availed under the Scheme if prosecution for non-filing or proceeding of adjudication of penalties has already been initiated under the Act?

Yes. After the requisite belated forms, statements, returns etc., have been filed under the Scheme, the Eligible Company, after the belated filing has been taken on record, shall file a Form CFSS-2020 within 6 months of closure of the Scheme without payment of any fees. Based on the aforesaid filing, a certificate of immunity will be issued to the Eligible Company.

Once the immunity certificate has been issued, the authorities will withdraw the following:

• Prosecution (if any) pending before concerned court; and
• Proceedings (if any) initiated under Section 454 of the Act for adjudication of penalties.

We provide best in the class service in the profession with complete satisfaction of our client with total confidentiality of the data.

Looking forward to hear from you soon!

DISCLAIMER: The information given in this document has been made on the basis of the provisions stated in the Notification. It is based on the analysis and interpretation of applicable laws as on date. Under no circumstances whatsoever, the blogger shall not be responsible for any loss, claim, liability, damage(s) resulting from the use, omission or inability to use the information provided in the document. 

By

CS Diwakar Agrawal

Mob: +91-9911746549

Independent Director Registration In Data Bank

Independent Director Registration

In Data Bank (IICA)

Legal Provision: Pursuant to the notification of the Ministry of Corporate Affairs (“MCA”) dated October 22, 2019, an online data bank for the independent directors (“Data Bank”) has been rolled out by the Indian Institute of Corporate Affairs (“IICA”). 

Introduction of Data Bank for IDs and inclusion of name: MCA has introduced the concept of Data Bank for ID’s vide its notification dated October 22, 2019 which came into effect from December 1, 2019. IICA has been authorized to create and maintain the Data Bank. Every person who is currently acting and who is willing to appoint as an ID has to register themselves with IICA by February 29, 2019 but it has been extended upto April 30, 2020 by amendment dated February 28, 2020. For those intend to be appointed as an ID, are required to apply for inclusion of name in the Data Bank before such appointment.

Period of Registration: The application for inclusion of name in the Data Bank can be for one year, five years or for the person’s life-time.

Fees: Individuals can apply by paying a fee of INR 5000 (+ GST) for one year and fee for five years INR 15000 (+ GST) & Lifetime INR 25000 (+ GST)

Renewal: IDs will also have to get their registration renewed 30 days before the expiry of the registration, unless the registration is availed for life-time. If an ID fails to renew the registration, his/her name shall stand removed from the Data Bank.

Additional declaration by ID: Pursuant to provisions of rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, every ID is now required to declare that their names are included in the Data Bank each time the independency declaration is submitted under section 149(7) of CA, 2013. Further, the company has to declare annually in its boards’ report that the IDs appointed on the Board have cleared online proficiency self-assessment test conducted by IICA, unless they are otherwise exempted from same.

Online proficiency test: Every individual whose name is entered in the Data Bank shall within 1 (one) year from the date of inclusion of his/her name in the Data Bank shall appear for an online proficiency self-assessment test and secure at least in aggregate 60 (sixty) per cent of the marks and failing which, his/her name shall stand removed from the Data Bank of IICA. There’s no bar on how many times the test can be taken.

Exemption from online proficiency test: An individual who has served a period of not less than 10 (ten) years either as director or key managerial personnel in a

• ·        Listed public company or
• ·       Unlisted public company having paid-up share capital of INR 10 (ten) crores or more
• ·        Body corporate listed on a recognized stock exchange

shall not be required to pass online proficiency self-assessment test. However, he/she will still be required to get his/her name included in the Data Bank.

We provide best in the class service in the profession with complete satisfaction of our client with total confidentiality of the data.

Looking forward to hear from you soon!

DISCLAIMER: The information given in this document has been made on the basis of the provisions stated in the Notification. It is based on the analysis and interpretation of applicable laws as on date. Under no circumstances whatsoever, the blogger shall be responsible for any loss, claim, liability, damage(s) resulting from the use, omission or inability to use the information provided in the document. 

By

CS Diwakar Agrawal

Mob: +91-9911746549

Highlights of Budget

Highlights of Budget for the Year 2019-2020 by 

BJP Government 2.0

The Finance Minister Smt. Nirmala Sitharaman unveiled a budget aimed at boosting infrastructure and foreign investment, the first since the Bharatiya Janata Party-led by Prime Minister Shri Narendra Modi returned for a second term in power. The budget has been presented with a 10-year vision in mind. The startups are being given a whole set of tax benefits. Here are the highlights of the Budget for the year 2019-2020 :

Direct Taxation

1.   Interest deduction on housing loan under Section 80EE increased by 1.5 lakhs for home loans taken on self-occupied house property by 31/3/2020, houses with the cost of Rs 45 lacs will be eligible for this. 

2.   Interchangeability of PAN and Aadhar for ease and convenience of taxpayers. The income Tax return can be filed using Aadhar Number!!

3.  To discourage cash payments TDS@2% on withdrawals exceeding 1Cr per annum from a bank account

4.    Surcharge for individuals having taxable income from Rs 2 crores to Rs 5 crores increased to 18% from 15%

5.    Surcharge for individuals having taxable income from Rs 5 crores to Rs 10 crores increased to 22% from 15% – FY 2019-20

6.    Proposal to give relief in levy of securities transaction tax

7.  Corporate tax worth 25% that is applicable to companies with an annual turnover Rs 250 crore will be applicable to the ones with an annual turnover of Rs 400 crore

8.   35AD extended to Li-On battery, Semi-Conductor, Laptops, Fabrication & Photo Volic

Infrastructure

1.    Focus on investment in infrastructure, national highways and aviation sectors

2.    The second phase of Bharat Mala to develop state highways

3.    A comprehensive restructuring of national highways will be taken up

Education

1.    National education policy to propose major changes in both secondary and higher education

2.    Swayam Initiative – Digital education to be promoted

3.    Greater focus on research and development – National Research Foundation to fund and promote research – the pooling of research grants from various ministries and disbursing them, preventing duplication of research projects

4.    For the Youth – New national educational policy to transform the Indian education system

Startup Development

1.    Government to introduce a host of exclusive programs for startups on DD News

Household

1.    Provision of housing, electricity, clean cooking facility, safe and adequate drinking water to all in rural India

2.    Encouragement of rainwater harvesting, groundwater recharge, and management of household wastewater for reuse in agriculture

3.    Har Ghar Jal – to all rural household by 2024

4.    7 crore LPG connections delivered to rural households

Pension

1.    Proposed pension benefit to 3 crore retail traders and shopkeepers whose annual turnover is up to Rs 1.5 crore  

MSME

1.    350 crore rupees allocated for 2% interest subvention for all GST-registered MSMEs on fresh or incremental loans

2.    MSME: Large-scale extensive reforms planned, government to create a platform for MSME payments

3.    MSME to get loans up to 1 crore within 59 minutes. Loans worth Rs. 350 crore already disburse

Women Empowerment

1.    Committee to be formed with Public and Private stakeholders for gender equality: FM

2.    Every SHG Women having Jan Dhan Account – Rs. 5,000/- overdraft allowed: FM

3.    Loan up to 1 lakh under Mudra Scheme for Women entrepreneurs: FM

NRI

1.    Proposal for Issuance of Aadhar Card on arrival for NRIs with Indian Passports: FM

2.    Aadhaar card for NRI’s post-arrival in India

3.    To increase NRI investment in Indian capital market – NRI portfolio scheme route and FPI route should merge

Railway Budget

1.    Railway infra would need an investment of 50 lakh crores between 2018 and 2030;

2.    PPP  to be used to unleash faster development and delivery of passenger freight services

3.    Railway Station Modernisation will be launched this year.

4.    Indian Railways to be encouraged to invest more in urban and suburban regions

5.    657KM of Metro Rail operational in the country.

Banking and Financial Sector

1.    Reforms will be taken to strengthen governance in Public Sector banks

2.    NPAs of commercial banks reduced by over 1 Lack Crores over last year

3.    Record Recovery of over 4 Lack Crore with IBS

4.    NPAs of commercial banks reduced by over 1 lakh crore over last year

5.    After Consolidation of Public Sector Banks, now 70,000 Crore of Capital boost for credit improvement

6.    Government has smoothly carried out consolidation, reducing the number of PSBs by 8

7.    NBFCs – that are fundamentally sound, will get funding from Government to a total of 1lakh crore during the current financial year

8.    RBI has limited Regulatory Authorities, Now the Regulatory Authorities of RBI over NBFC will be placed

9.    Proposals for strengthening the regulatory authority of RBI over NBFCs – Debenture Redemption Reserve to be maintained

10. Proposal to return regulatory authority from NHB to RBI.

Electric Vehicles

1.    Lower GST rate from 12% to 5% on Electric vehicle and Additional Income Tax Deduction of 2.5 Lakh on Interest paid on loan taken to purchase an electric vehicle

2.    To make electric vehicles affordable, additional IT deduction on 1.5 lakh on interest paid on loan taken to purchase electric vehicles

Technology

1.    Solar storage batteries and chargers included in 35AD deduction: FM

2.    Program of mass scaling of LED Bulbs – Approx. 35 Crores of LED bulbs distribute

3.    Machines and robots to be deployed for scavenging

4.    Focus on VR, AI, Robotics training to youth to align India with the World.

FORM 22A (ACTIVE)

ALL ABOUT FORM 22A (ACTIVE)

MCA has introduced on 21^st February, 2019, Companies (Incorporation) Amendment Rules, 2019. These rules shall come into force from 25^thFebruary, 2019.  A new Rule 25A inserted after Rule 25.

A New Form 22A (e-form Active) Introduced.

Purpose:

This is MCA’s new tool to identify active company and non-active company and enforce to vacate the office of disqualified members of Board and complete the pendency of filing to ROC

Summary:

Every Company incorporated on or before 31st December, 2017 shall file Particular of Company, Directors, KMP’s, Auditors and Registered Office in e-form Active (i.e. e-form 22A) on or before 25.04.2019.

If Company has not filed its due Financial Statement (AOC-4) or Annual Return (MGT-7) or both with ROC. Such Company shall not allowfiling e-form ACTIVE. But those companies are under management dispute can file e-form 22A ACTIVE.

Therefore, Companies are required to complete its Annual Filing before filing of e-form Active (i.e. 22A) except management disputed Company.

If there is any management dispute and company has informed the same to ROC. In such case even without completion of Annual Filing (AOC-4 or MGT: 7) Companies are allowed to file e-form ACTIVE.

Exempted to file e-form 22A (e-form Active)

· Struck off Companies (Whether by ROC or sue motto)

· Companies under process of Strike off

· Companies under amalgamation

·Companies Incorporated after 31^st December, 2017

FAQ

Q.1 If a Company obtained status of ‘Dormant’ whether required to file e-form Active (22a)?

Ans.Only above mentioned 4 category Companies are exempted from filing of e-form Active. Therefore, one can opine that yes Dormant Companies are also required to file e-form Active.

As per Rule 25A, Every Company required to file this form with ROC till 25.04.2019. If Company fails to file this form then Company barred to file (INC-22, DIR-12, SH-7 or PAS-3).

In such Case whether before 25th April, 2019 and before filing of e-form 22A Company want to do any or all of below mentioned tasks whether Company is allowed to do:

          A.   Change of Registered office of Company

          B.  Increase in Authorized Capital of Company

          C.  Appointment or Resignation of Directors / KMP

As per Rules Last date of Filing of Form 22A is 25th April, 2019. Therefore, If Company wants to alter anything in status of Company as mentioned above on or before 25th April, 2019 “allowed”.

Restriction on Company shall be applicable on 26th April, 2019 only in case Company fails to file e-form 22A.

Q.2 Whether LLP also required to file e-form 22A?

Ans.As per Language of Rule 25A “Every Company”, therefore, one can clearly opine that Only Companies are required to file this Form.

LLP are notrequired to file e-form 22A. They don’t require filing this form with ROC.

Q.3 What are information required to mentioned on Board of Company at Registered office?

Ans.  As per Section 12(3)(a), Every company shall-

Paint & Affix its Name (In Language of Locality)

Address of Registered Office (In Language of Locality)

IMPORTANT NOTE:

A.    In case of any Company (Private / Public) having paid up share Capital of Rs. 50,000,000/- or more required to appoint Company Secretary. And mandatory need to file form. Otherwise such Company shall not allow filing e-form Active.

B.  If any director of Company is disqualified. Company required file e-form DIR-12 for their vacation as per Section 167. Otherwise such Company shall not allow filing e-form Active.

C. Company has to maintain proper registered office and have to affix proper Board at Registered office by mentioned information as per Section 12.

D. Company properly have to appoint CEO, CFO, CS, if Applicable on Company.

E.  Completion of Annual Filing I.e. AOC-4 / MGT-7 up to date till F.Y. ended 31.03.2018 is mandatory. Otherwise such Company shall not allow filing e-form Active.

Q.3 Consequences If Company fails to file e-form 22A till 25th April, 2019?

Ans.  There are two types of consequences:

1.   After 25th April, 2019 if any Company will file e-form 22A. Company have to pay Fees of Rs. 10,000/-.

2.   Status of Company in Master Data shall be changed as “Active- Non Compliant” w.e.f. 26th April, 2019.

3.   Barred of Filing of Forms: Once status of Company changes as ‘Active Non-Compliant” It will be restricted to file following below mentioned forms:

Sh-7 (Increase in Authorized Capital)

PAS-3 (Allotment of Shares)

DIR-12 (Appointment and Resignation of Director (Except Cessation)

INC-22 (Change in Registered Office)

INC-28 (For purpose of Amalgamation or de-merger)

4.   Action by ROC: Company shall be liable for action under Section 12(9). ROC may remove the name of Company from its record.

FEATURES OF E-FORM 22A (ACTIVE)

Initial Details required mentioning in e-form 22A:

1.   Name and Registered Office of Company

2.   Latitude & Longitude of (RO)

3.   Mail ID & OTP Verification

4.   OTP shall be generating to file e-form 22A.

5.   Address Proof of Registered Office.

6.   Photo of Registered Office

7.   Showing external building and

8.   Inside office also showing therein atleast one director/KMP who has affixed his/her DSC on e-form 22A.

9.   Details of DIRECTORS required being mention in e-form 22A.

Name of Director                               

Status of DIN

NOTE:

1.   Company has to ensure that DIN of Directors is Active. DIN are not De-activated due to non-filing of DIR-3KYC or Disqualified u/s 164(2)

2.   Details of AUDITORS (Statutory / Cost) required being mention in e-form 22A.

Name of Auditor/ Firm                       

Membership No.

3.   Period of Account for which appointed

4.   Information about KMP:

5.   Details of MD/CEO/ WTD (DIN/ PAN, Name, Designation)

6.   Details of Company Secretary

7.   Details of CFO

8.   One more important Information:

SRN of AOC-4 and MGT-7 filed for Financial Year 2017-18

DISCLAIMER: The information given in this document has been made on the basis of the provisions stated in the Notification. It is based on the analysis and interpretation of applicable laws as on date. Under no circumstances whatsoever, the blogger shall be responsible for any loss, claim, liability, damage(s) resulting from the use, omission or inability to use the information provided in the document. 

Written By

CS Diwakar Agrawal

Mob: +91-9911746549